IR Notes

The negotiators for the “trilogue”, i.e. the European Commission, the Council and the European Parliament, reached an agreement, which was presented on 1 March, on the revision of the existing directive 96/71 on the posting of workers. This “common approach” must be confirmed by the Parliament and the Council before the directive is finally adopted. So the coming weeks will be crucial. We will then know whether the efforts made by the two MEPs responsible for the negotiations – Agnes Jongerius (S&D) and Elisabeth Morin-Chartier (EPP) – to strike a balance, and thereby avoid a new east-west divide in the EU, will withstand opposition from the most recalcitrant countries.  According to the two MEPs, the legal basis of the directive remains the free provision of services. However, the first article states that the directive is also designed to protect workers and that under no circumstances can its application undermine the rights granted by the EU’s Charter of Fundamental Rights. These details will have to be taken into consideration by the Court of Justice when it has to interpret the text in the event of disputes.  Central to the text is the principle of “equal pay for equal work in the same workplace”. This principle will be applied “from the first day of work”, announces a pleased Agnes Jongerius, who believes that, as a result, posted workers will be considered “work colleagues” by employees in the host country. In her opinion, this will mean the end of rivalry linked to low pay. As envisaged in the compromise regarding the application of employment law, which was reached in the Council in late 2017, the length of postings will be limited to 12 months (instead of the current 24 months), although there will be the possibility of extending them for up to 18 months. In practice, posted workers remain subject to the social security laws of their home country for up to 24 months and, beyond that, are subject to the social security laws of the host country. However, in the case of employment rights, if a posting exceeds 12 months (excluding extensions), they will be subject to most of the employment law of the host country and not only core employment rights. However, the parties remain free to choose the applicable law for the employment contract. The compromise was welcomed by the European Trade Union Confederation which “calls on MEPs and governments” to approve it (see press release).  In contrast, the employers’ organisation BusinessEurope is critical of the decision to lower the time limit from 24 to 12 months. For Business Europe, it represents a “bad deal that will harm the functioning of the Single Market for Services” (see press release).

• Clarification of the contents of the revision of the “posting of workers” directive (see p.1): the compromise states that equal pay must take into account all relevant factors, comparison must not be based on the individual items. The text clarifies the system of different benefits, detailing what must be paid in accordance with the rules of the host country, what forms part of the minimum wage and, above all, what the employer must pay in addition to this wage. In addition to the extension of the obligation to comply with the collective agreements generally applicable to all sectors (while this one currently applies only to the construction sector), Member States will be able to extend the application of unextended collective agreements to include posted workers. Furthermore, the compromise provides for a short transposition period of two years, instead of the four years advocated by the Council, which should ensure that the new rules are applied by summer 2020. Additionally, a clause requires simultaneous application in all Member States at the end of the transposition period. Finally, the text still excludes road transport from the scope of application of the proposed directive. The existing directive 96/71 will continue to apply to this sector until such time as the proposed “mobility package” legislation, introduced in May 2017, is adopted. The European Transport Workers’ Federation (EFT) is unhappy with the situation (see ETF press release).

• Analysis of the economic and social situation in Member States: on 7 March, The European Commission published its annual analysis of the economic and social situation in Member States, which includes a review of progress in implementing country-specific recommendations and an assessment of possible imbalances (see press release and questions and answers factsheet). On the basis of this analysis, Member States will, in mid-April, submit their national reform programmes and stability programmes (or convergence programmes for countries outside the euro zone) which will address the problems raised by the Commission. Then, in spring, the Commission will present its proposals for a new series of country-specific recommendations identifying the main challenges for each country. The social partners are involved in this process, as indicated in a recent Eurofound study.

Renewal of a fixed-term contract set to terminate at retirement age: the Court of Justice found a provision which enables the parties to an employment contract to postpone, by mutual agreement, without time limit or any other condition and potentially on several occasions, the agreed date of termination fixed at the normal retirement age to be compliant with directive 1999/70 of 28 June 1999 on fixed-term work. The Court deems successive postponements of the termination of the employment contract acceptable in the case of an employee who finds himself “at the end of his working life” and who “with regard to the fixed term does not have the alternative of an otherwise indefinite employment relationship”. These renewals are not, therefore, considered abusive (CJEU, 28 February 2018, case C-46/17, John).

• Pilot projects to combat burnout: in an opinion adopted on 27 February, the National Labour Council (CNT), which brings together nationally representative social partners, requested the setting up of pilot anti-burnout projects in a number of companies.

Reform of vocational training: following the conclusion, on 22 February, of a national interprofessional agreement by the representative social partners, the government unveiled a far-reaching reform of vocational training. Introduced on 5 March, it incorporates some of the content of the agreement, but also goes well beyond it, particularly with regard to the governance of vocational training (see Ministry of Labour press release). In fact, under the government’s plan, the social partners will not be involved in the sourcing of funding for vocational training. It also changes the way the personal training account works. Employees will no longer accrue training hours in their account, but will instead receive 500 euros a year, up to a limit of 5,000 euros. Unqualified employees will receive 800 euros a year. The aim is to give employees control over their training.

General Electric: on 23 February, the American multi-national signed an agreement to set up a European Works Council to cover all of its 100,000 European employees (see photo). Up to this point, the group had set up European Works Councils for some of its European subsidiaries (see IndustriAll Europe press release). The United Kingdom remains within the scope of application of the agreement which provides for a central European Works Council (Central Committee) and sub-EWCs (Business Committees). The central EWC will be responsible for transnational projects which affect employees in at least two different countries and may have “a significant impact on employees” in the divisions concerned. The sub-EWCs will have responsibility when such projects involve only one of GE’s divisions. Extraordinary meetings may be scheduled, in the case of the central EWC, when a project has a significant impact on the interests of at least 1.5% of the salaried employees working in the divisions concerned. A similar procedure is available for the sub-EWCs when a project affects a division but, in this case, no minimum number of employees is required. Finally, if it is not possible to convene the central EWC or sub-EWC in a reasonable time, the management can convene a “consultation sub-committee” made up of the select committee of the body concerned (the central EWC or sub-EWC) and its employee representatives from the countries affected. The agreement stipulates that under no circumstances will any project be implemented at a European, national or local level until the European Works Council (central, sub-EWC or sub-committee) has had an opportunity to provide its opinion and receive a response to that opinion from management.

• Safran: members of the Safran European Works Council (58,000 employees) met with employee representatives from the Zodiac Aerospace group (35,000 employees), which Safran has recently acquired, at a meeting organised in Brussels by the select committee of the Safran European Works Council (see Safran European Works Council press release). Zodiac had no European Works Council and so this meeting provided a first opportunity for representatives from several European countries to meet and talk together. The Zodiac employee representatives will, in the first instance, attend the European Works Council in an observer capacity (see also IndustriAll Europe press release.


• Yazaki: on 18 January, the Japanese automotive supplier Yazaki (285,800 employees, including 24,888 in the EU) signed an agreement to set up a European Works Council. The group operates mainly in Romania (9,806 employees), Bulgaria (4,718 employees), Slovakia (2,625 employees) and Portugal (2,168 employees). The agreement is unique in that it opens up the European Works Council to observers from non-EU countries (Morocco, Russia, Serbia, Turkey, Tunisia and Ukraine) who can attend the council’s second annual meeting.

Alstom-Siemens: on 5 March, in a coordination meeting organised under the auspices of IndustriAll Europe, the Austrian, Belgian, British, French, German, Italian, Norwegian, Spanish, and Swiss trade union organisations represented in the French group Alstom and from Siemens Mobility, the railway construction division of the German group Siemens, adopted a common declaration. The representatives’ demands included that “all jobs and all European sites, in all countries, be secured” and that “workers’ rights to information, consultation and participation in the envisaged merger plan be respected” (see IndustriAll Europe press release).

• A project to create European Works Councils in the transport sector: in 2017, the European Transport Workers’ Federation launched a project to increase the number of European Works Councils in the transport sector. “We’ve counted 80 potential new European Works Councils, particularly in road transport and airport services”, points out Fabrice Warneck, manager of the European office of Syndex, which is responsible for the project. It involves work to identify companies which fall within the scope of application of the directive, and then a series of seminars with trade union representatives and managers from the companies concerned to encourage them to negotiate the setting up of a European Works Council. The project also aims to enhance the operation of the existing European Works Councils.

The gender pay gap in the EU exceeds 16%: On 8 March, Eurostat published an article containing statistics on the gender pay gap in the EU in 2016. Women’s earnings were 16.2% below those of men.  In other words, for every euro earned in an hour by a man, a woman earns on average 84 centimes. The pay gap varies considerably from one Member State to another, from a little over 5% in Romania and Italy to more than 25% in Estonia, followed by both the Czech Republic and Germany (almost 22%). No significant progress has been recorded since 2011 (16.8%). Since 2011, the gap has actually widened in ten Member States. The most significant progress was recorded in Romania (down 4.4 points), Hungary (down 4 points), Spain and Austria (down 3.4 points), Belgium (down 3.3 points) and the Netherlands (down 3 points) (see press release).